EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925286
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Reliance Worldwide applied for a TCO in respect of certain thermosyphon arrester valve parts on 16 July 2009.
Instrument
TCO No 0925286 was made on 02 October 2009. It declares that those certain thermosyphon arrester valve parts are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0925286 is taken to have come into force on 16 July 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Parliament of Australia, established a framework for the regulation of customs and excise duties. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the rate of customs duty on specified goods. This scheme was designed to address the problem of high customs duties on goods where no substitutable Australian-made products are available. The policy objective is to encourage the import of goods where no suitable domestic alternatives exist, thereby providing consumers with more affordable options. The instrument in question, Tariff Concession Instrument No. 0925286, was introduced to provide a concession on the duty for certain thermosyphon arrester valve parts, reflecting the absence of substitutable goods produced in Australia. This measure took effect from the date the application was lodged, 16 July 2009, and does not impose any liabilities or disadvantage existing rights of non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCO) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who wishes to apply for a TCO for specific goods, provided those goods are not prohibited under section 269SJ. The application process necessitates that the goods in question do not have substitutable alternatives produced in Australia, as defined by sections 269C, 269D, 269E, and 269F of the Act. The geographic reach of this Act is national, operating within the Commonwealth of Australia, and its application extends to any goods imported into Australia. The Act does not specify any exclusions or exemptions beyond those stated in section 269SJ. The CEO has the authority to extend or restrict the application of this Act through subordinate instruments, such as the TCO No 0925286, which provides a zero rate of duty on certain thermosyphon arrester valve parts. This TCO came into force on the date the application was lodged, 16 July 2009, and does not affect any existing rights or liabilities of persons other than the Commonwealth, but allows for duty refunds for importers of the specified goods.
Key Provisions
The main operative sections of this legislation concern the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). When an application for a TCO is lodged, the Chief Executive Officer of Customs (CEO) must determine if it meets the core criteria set out in section 269C of the Act. Specifically, this involves checking whether any substitutable goods were produced in Australia on the date the application was lodged (section 269P(3)). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, specifying the lower rate of customs duty that applies to the goods in question (section 269P(3)).
The Act imposes certain obligations on the parties involved. An applicant for a TCO must ensure that their application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO, upon accepting a valid TCO application, must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted (section 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on such persons (section 269S(2)).
Failure to comply with the provisions of the Act can result in civil or criminal consequences. Specifically, section 269K(1) requires the CEO to invite submissions from interested parties. If the CEO does not comply with this requirement, it may lead to legal challenges regarding the validity of the TCO. Additionally, if any person or entity imposes liabilities or disadvantages to others contrary to section 269S(2), they may face legal action. The penalties for breaches of the Customs Act 1901 can include fines and imprisonment, although the specific penalties are not detailed in this particular TCO but would be governed by the broader Customs Act provisions.
Section 269P(3) also mandates that if a TCO application meets the core criteria, the CEO must issue a written order. Any failure to do so could result in legal disputes over the tariff rates applicable to the goods. The Act further provides that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so any actions that contradict this provision could lead to penalties or nullification of the TCO.